Awaiting More Current Consumer Version

24 hours after markets witnessed a powerful 3.4% consumer component (highest
since Q1 2007) in Q3 GDP, they will obtain a more current version of consumer
performance in the Sep personal spending (12:30 GMT) exp -0.5% after
+1.3% in Oct. Regardless of whether the powerful 3.5% increase in the consumption
component of US Q3 GDP was propped by cash-for-clunker programs and 1 st time
home buyer credits, the figure was a sufficient temporary boost for risk assets
at the expense of the USD and JPY. But reminders of prolonged losses
from Sony and the fourth consecutive monthly decline in annual German retail
sales may cast a pall on the overnight jump in risk appetite.

Yesterday we highlighted how EURUSD and S&P500 narrowly escaped a
break below their respective 8-month support levels of $1.47 and 1,047. The
US GDP report was instrumental in boosting equities and risk currencies. But
today's US figures on personal spending, consumer sentiment (exp at 70
from initial 69.4) and Chicago PMI (exp 48.5 from 46.1) will be key in determining
the extent of yesterday's recovery in risk assets. Short of a close above
1,075 in the S&P500 and 10,000 in the Dow would keep the question mark
for yesterday's rally.

But markets are already doubtful. Overnight stabilization in the
Japanese yen resulted from bank of Japan 's vote to stop buying corporate
debt by year-end. The second monthly straight decline in Japanese unemployment
helped prompt the BoJ to vote in favour of withdrawing some liquidity. Nikkei
futures dropped back below 10K, Dow futures off 21 pts while S&P500 futures
-2.6 to 1061.

US crude unable to above the $80.40-45 , which is the low on Oct
22-23 and Oct 20. A close above 81 will be required for risk appetite to back
up fresh selling in USD and JPY against the majors. Disappointing US figures
today risk calling up 78.80.

USDJPY eyes support at 90.70 -- the trend line support, which
held up successfully on Wednesday. A break below it would provoke additional
losses towards 90.20. Any renewed negative readings in US consumer spending
would support the notion that last month's increase was mainly driven
by the now expired cash-for-clunker programs.

GBPUSD recovery still deemed doubtful as long as no rally above
$1.66 is seen. Downside target starts at $1.6470.

USDCAD is vulnerable to a break below 1.0630, which could extend
losses towards 1.0550 in the event of continued pick up in risk-seeking trades
emerging from strong US figures later today.

CADJPY was able to recovery 80% of Wednesday's decline
but resistance remains imposed at 86. Downside risk suggests fresh retreat
towards 84.80, followed by 83.90.

Ashraf Laidi is Chief FX Strategist at CMC Markets and
author of "Currency Trading and Intermarket Analysis: How to Profit from
the Shifting Currents in Global Markets" Wiley Trading.

This publication is intended to be used for information
purposes only and does not constitute investment advice. CMC Markets (US) LLC
is registered as a Futures Commission Merchant with the Commodity Futures Trading
Commission and is a member of the National Futures Association.